Things seem to be moving Racal Electronics Plc’s way over the planned flotation of Vodafone as Racal Telecommunications Group Plc, and, as expected, the Stock Exchange has given the company permission to float only 20% of the equity in the first instance, rather than the 25% that the rules normally require. Its only stipulation is that Racal should put out at least UKP350m of equity, which should suit Racal well enough – it hopes that the 20% will raise at least UKP400m. On the other major sticking point, the concern of institutions at seeing their holdings heavily diluted as a result of a substantial part of the issue being offered to US investors, the Financial Times reports that a compromise is likely to be reached whereby existing Racal holders will have first call on 75% of the shares on offer, which should still leave $100m for the Americans, and would meet the informal rule that no more than 5% of a firm’s equity should be offered to outsiders on an exclusive basis in any one year.
